By: John Ursus
Timeframe: W1 Recommendation: Short Position
Entry Zone: 87.70 – 88.50
Take Profit Zone: 74.00 – 75.50
Stop Loss Zone: 89.70 – 90.50
The NZDJPY has paused its massive rally as forex traders were unnerved by economic news out of New Zealand which has suggested that the New Zealand Dollar may have gotten ahead of itself while geopolitical events have resulted in an increase of buy orders for the Japanese Yen. The past four weeks have seen a halt in the upward momentum and the next few trading weeks may prove crucial for this currency pair.
Price action will face its first test when it approaches a weak support level which will likely lead to a breakdown and open the way for the NUDJPY to test its Fibonacci retracement level. Just beneath the Fibonacci retracement level is a solid support level and the NZDJPY is not expected to breakdown below it. Trading could be choppy in this currency pair over the next few weeks and forex traders should remain cautious.